Netflix Reduces Q3 U.S. Sub Guidance; Shares Slide

Thu, 09/15/2011 - 09:12 EDT - Forbes.com - Top Stories

Netflix shares are trading lower Thursday morning after the company reduced its Q3 subscriber guidance. The company did not change its financial forecast or its international subscriber guidance. But the reduced expectations for the U.S. market are clearly troubling investors, as the online video company suffers the consequences of a recent decision to charge for ...

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Netflix, Inc. (NFLX) is up 12.2% over the last one month and 45% since we at Bidness Etc rated it a Buy in January. The company’s stock price started to drop following the announcement of the company’s results for the second quarter of fiscal year 2014 (2QFY14) in July. This was because the streaming giant gave a weaker profit guidance for 3QFY14 compared to what analysts had estimated.

Netflix shares plunged nearly 15 percent on Wall Street on Thursday as the video rental giant giant slashed its forecast for subscriber growth.Shares of the Los Gatos, California-based company, which offers movies and television programs by DVD or streaming online, were down 14.9 percent at $177.62 in early trading in New York.Netflix said in a message to shareholders that its subscriber forecast for the United States for the third quarter was being cut from 25 million to 24 million.Financial guidance for the quarter was unchanged, the company said.

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Carl Icahn has lost $200 million on Netflix stock since Wednesday, when the company's stock plunged 27% in after hour trading. It all fell apart when Netflix reported lower than expected subscriber growth in its 3rd quarter earnings report. Then it cut its growth expectations for the 4th quarter. It didn't help either that HBO chose Wednesday to announce that it would launch a streaming-only content service by next year.

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Did Netflix make a big boo-boo with its decision to shift to charging separately for its streaming and DVD businesses? That?s what the Street is trying to figure out after the company this morning revised its Q3 subscriber guidance. While Netflix didn?t change its financial forecast, it reduced expectations for subscriber growth, a vivid demonstration ...

S&P futures have tracked both European and Asian markets lower, which were dragged down by the big EPS miss and guidance cut reported by Amazon on Thursday. Meanwhile, the pounding of the dollar has resumed with the euro and sterling strengthening against the dollar due to renewed political concerns after this morning's stunning failure by the Senate GOP to pass a "skinny" Obamacare repeal after John McCain sided with democrats.